Thurston Designs Manufactures Printed Fabric for Use in Upholstery, Draperies

Essay

Thurston Designs manufactures printed fabric for use in upholstery, draperies, and other home design applications. Thurston filed for a copyright registration on one of its designs, an abstract hexagonal honeycomb pattern, indicating that the design had been made as a "work for hire." Fabric printed with that design carried the following designation: "© 2008 Thurston Designs."
One of Thurston's competitors, Crandall Fabrics, produced a fabric with a design that is very similar, if not identical, to Thurston's honeycomb. Thurston filed for copyright infringement, and Crandall defended by stating that Thurston was not entitled to ownership of the copyright under the work-for-hire provision of the Copyright Act because the design had been created by a free-lance artist, not an employee.
The facts indicate that one of the two owners of Thurston, Anna, worked with an artist, Tomas, in creating the copyrighted design in 2008. Tomas worked with Anna on several other designs in 2008 as well over a period of seven months. At the end of seven months, Tomas ceased working for Thurston and moved to a different city.) Tomas reported to work at Thurston almost every day, generally working from 1:00 to 4:00 p.m., and conducted all of his work for Thurston on its premises. Thurston had hired several individuals like Tomas in the past. Typically, such individuals are recent graduates of design schools and the practice in the industry is not to consider them the owners of the intellectual property rights that might arise in the designs that they work on.
Anna had conceived of the honeycomb design and had played around with the design by laying out pieces of real honeycomb. Anna was unable to prepare the design herself, however, as she is not skilled at drawing. She asked Tomas to do a pencil drawing of her lay-out. Anna was not satisfied with the initial drawing that Tomas prepared, and had a conversation with Tomas in which she offered several corrections. She wanted the design less refined and more free-form. She made photocopies of the drawings that Tomas subsequently prepared and cut and pasted them on paper to approximate the look that she wanted. Anna then had Tomas prepare additional drawings based upon her efforts.
Anna stood over Tomas for four of the six hours he spent on the drawings, instructing him on when and where to change his drawing. After the drawing was complete, Anna picked colors from Japanese silk books containing over 500 colors and told Tomas how to color the drawings. She had him alter the color scheme several times before she was satisfied with the results.
Tomas was paid $75 per day for his efforts on this and other projects. He was paid by check on a weekly basis. Although Tomas was under the impression that he did not receive employee benefits or have taxes withheld, the other owner of the firm, Ronald, who handled the business affairs, testified in court that Tomas received normal benefits, including disability and worker's compensation insurance, that income taxes and social security taxes were withheld from his pay, and that Thurston paid the employer's share of the social security taxes on his behalf. Tomas did not receive medical benefits.
Should Crandall prevail on its defense? Explain thoroughly.